The RBA today set up for a rate cut on 7 May.
After thirteen months in a row where they cut and paste the following words:
the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
they changed to:
the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.
See the difference?
For the last thirteen meetings, they have said that policy is sufficient to hit their targets. Now policy will be set to make sure their targets are hit.
That’s a meaningful change. It is relevant that it occurred at the same time as they cut their domestic and global growth forecasts.
It isn’t a lock just now — more weak data is required to complete the case — but the option will certainly be discussed at the May meeting.
Forget the unemployment rate test everyone is talking about — a 0.4% on trimmed mean CPI on 24 April will lock in a 25bps cut on 7 May.